Phones from manufacturers like Apple to cost more as government hikes import duty on mobiles
Finance minister Arun Jaitley on Thursday announced a hike in customs duty on mobile phones to 20% from 15% to provide further impetus to domestic manufacturers in line with the government’s ‘Make in India’ initiative.
Presenting the Union Budget 2018-19, Jaitley said he was making a calibrated departure from the usual practice of reduction in customs duties.
He said this is being done in view of the “substantial potential” for domestic value addition in sectors like food processing, electronics, auto components and footwear. The move, Jaitley said, will lead to the creation of more jobs in the country.
“To further intensify domestic value addition and ‘Make in India’ in these sectors, I propose to increase the customs duty on certain items. I propose to increase customs duty on mobile phones to 20% from 15% and on some other parts and accessories to 15%,” he said.
Commenting on the decision, Indian Cellular Association (ICA) National President Pankaj Mohindroo told PTI that this will be the last nail in the coffin of imports. “We are reaching a situation where imports would be nearly impossible,” Mohindroo added.
He said since bulk of mobile phones are manufactured domestically, there will be no impact on their prices. The exception will be a few brands, that are still making phones overseas.
“There will be no increase in mobile phone prices since 81% of the volume and 84.5% of value is manufactured in India and we will cross 90% in both terms in 2018,” he explained noting that the government seems to be determined to increase value addition in domestic manufacturing.
The prices of manufacturers like Apple, which are assembled in China and imported here, are expected to go up in the backdrop of the hike. Local manufacturers like Lava and Comio, meanwhile, welcomed the hike
Customs duty on smart-watches and wearables has been doubled to 20%, while specified parts and accessories of mobile phones have seen a duty hike to 15% from the current range of 7.5-10%.
Video game consoles will also attract a customs duty of 20%, up from 10%.
With agency inputs